Terayon Communication Systems, Inc. announced the industry's first 'telco-optimized' solution that allows telecommunication service providers to create new advertising revenue streams to support their ambitious rollout of IPTV (Internet Protocol Television) services.

At its booth (528) here at the TelcoTV Conference & Expo, Terayon is demonstrating how its new DM 6400-IPTV Network CherryPicker enables telecommunication carriers to seamlessly insert local advertisements into MPEG-4/AVC encoded digital video, the format most carriers have selected for their digital video service offerings. Advertising is a lucrative opportunity for telco carriers, as evidenced by the significant revenue it has provided broadcast and cable operators for decades. U.S. cable operators alone earned more than $4.3 billion in local advertising revenues in 2004 according to Kagan Associates.

In addition to advertising, telco carriers can also use the DM 6400-IPTV for other important digital video applications. These include the aggregation of programming content from multiple sources, grooming customized channel line-ups by 'cherry picking' programs from multiple programming sources, supporting payload-aware program redundancy and emergency alert system (EAS) messaging.

"Terayon has been at the forefront of the digital video revolution by enabling cable operators to deliver high definition and standard definition programming and to generate revenue through advertising insertion," said Kanaiya Vasani, Terayon Vice President of Marketing. "Our new DM 6400-IPTV Network CherryPicker -- which is 'telco optimized' with the new bundle of MPEG-4/AVC software and Gigabit Ethernet connectivity -- provides telecom carriers with the field-proven ability to insert content and advertising in the digital domain, without the complexity and cost of decoding and re-encoding processes."

"Advertising is a tremendous revenue opportunity that telco carriers must prepare for today as they architect networks to deliver digital video services," said Jerry Chase, CEO of Terayon. "We look forward to working with the industry to build systems that maximize video delivery and generate ad insertion revenue; creating the infrastructure today that will address both immediate and future needs and an additional revenue stream."

Working with Partners

In addition to TelcoTV, Terayon is also demonstrating its MPEG-4/AVC ad insertion solution at this week's SMPTE (Society of Motion Picture and Television Engineers) conference in New York City. At both shows, the DM 6400-IPTV is working with Adtec Digital's DPI-1200 advertising server.

Terayon is working closely with all of its ad insertion partners -- Adtec, C-COR and SeaChange International -- to ensure product interoperability. Terayon is also working with several of the largest vendors to the telecommunication industry -- including Nortel -- to integrate the DM 6400-IPTV as part of larger, complete digital video solutions for telecom carriers.